Political Focus on Rust Belt Could Help Boost VC Investment

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Much has been written in the tech industry as a result of the Presidential election. Many coastal VCs and entrepreneurs believe that Trump’s America-first, anti-immigration platform could put the brakes on the venture industry’s core globalization strategies. While this may be true, regardless of which candidate you supported, most would agree that with chaos and disruption comes opportunity.

We firmly believe mid-American VCs and entrepreneurs are well positioned to take advantage of future policy directions that assist in bolstering the industrial fabric of the middle of the country. Trump has repeatedly called for a return of the build-up of America’s manufacturing base. With this in mind, we witnessed a major power shift to the new “swing states” of the Rust Belt: Wisconsin, Michigan, Ohio, and Pennsylvania. These states (along with Texas, Missouri, and Colorado) are core to Mercury Fund’s network and at the base of our midcontinent industrial ecosystem investment strategy. In addition, the potential for lower corporate tax rates—especially on repatriated corporate cash—should drive increased investment in the U.S. and could move the needle in M&A by the major tech companies (Google, Apple, Microsoft, Oracle) that have been storing cash overseas.

For the past 12 years, Mercury Fund has focused on investing in entrepreneurs and innovation that originate in the middle of the country. Many of our current investment themes focus on innovative SaaS, cloud, and big data platforms that make the industrial ecosystems of Middle America more competitive and efficient. We believe, now more than ever, the Midcontinent represents a great venture capital opportunity.

[Editor’s note:To tap the wisdom of our network of Xconomists, we asked a few of them to answer questions heading into 2017 about the most pressing issues facing the innovation community, such as: “What possible actions by the new administration could significantly affect your company, your industry, and/or the health of the business environment, for better or worse?” You can see other questions and answers here.]

Blair is a co-founder and Managing Director of Mercury Fund, a seed and
startup venture capital firm headquartered in Houston, Texas. Follow @bgarrou